Today's Headlines

Bloomberg:

- Yields over benchmark rates on high-yield bonds narrowed to the least since October, prompting HCA Inc. and Seagate Technology to offer debt, amid speculation the worst of the recession may be over. The gap between yields on high-yield bonds and U.S. Treasuries narrowed 31 basis points yesterday to 15.85 percentage points, according to Merrill Lynch & Co. index data. With Treasury yields near record lows, the thinner spread cut company borrowing costs to the lowest in six months. “There is good fundamental value” in speculative-grade debt, New York-based Fridson said in an interview. “Imagine what’ll happen when all the institutions that have indicated they are earmarking some money for credit markets and for high yield specifically all decide to pull the trigger.”

- Manufacturing in the New York region contracted this month the least since September and the outlook for the next six months improved for a second time. The Federal Reserve Bank of New York’s general economic index rose to minus 14.7, better than forecast, from minus 38.2 the prior month when it reached its lowest level since data began in 2001, the bank said today. The New York Fed’s measure of new orders increased to minus 3.9 and a gauge of shipments rose to minus 1.8 from minus 26.7. The index of inventories decreased to minus 36 from minus 27. The index of prices paid was unchanged at minus 14.6, and the gauge of prices received increased to minus 18 from minus 23.6. A measure of employment rose to minus 28.1 from minus 38.2.

- The California Public Employees’ Retirement System said it plans to buy assets of Citigroup Inc. and other financial companies under the U.S. government’s $700 billion Troubled Asset Relief Program. Calpers, as the largest U.S. public pension manager is known, is setting aside “billions of dollars” and is ready for more investments, Henry Jones, a Calpers board of administration member, said in a speech in Seoul. The fund may buy “assets of these financial companies such as Citi and the others, assets that they’re trying to get off their balance sheets,” Jones said in an interview after the speech.

- Consumer prices posted their first annual decline since 1955 and unused American manufacturing capacity reached a record, alleviating concern that Federal Reserve actions will cause inflation to soar.

- Russia’s banks face an “avalanche” of bad loans this year with 20 percent of the debt likely to be in or close to default by year-end, according to UniCredit SpA. “Plunging asset quality is the main threat to the Russian banking industry and in fact to the economy as a whole,” UniCredit banking analyst Rustam Botashev wrote in a research note. He previously forecast non-performing loans would reach 9.5 percent.

- The expiration of options that allow the right to sell crude at $45 a barrel may drag prices toward that level, consultant Petromatrix GmbH said. There are 16,349 outstanding contracts to sell May oil futures on the NY Merc at $45 a barrel, the second most widely-held “put” option for the month after contracts at $40, exchange data shows.

- Barrett Wissman, a Dallas hedge fund manager, pleaded guilty to securities fraud as part of an investigation of corruption at New York’s $122 billion pension fund, state officials said. Wissman, an executive of HFV Asset Management LP, also agreed to a $12 million settlement as part of the probe of hedge funds and private-equity companies that won investments from the pension fund, according to New York Attorney General Andrew Cuomo, who today announced charges against former New York State Liberal Party Chairman Ray Harding as part of the probe.

- Fairfax Financial Holdings Ltd., the best-performing stock last year on the 77-member Bloomberg World Insurance Index, says gains from credit-default swaps are “history.” “The big money’s already been made,” Chief Executive Officer Prem Watsa told investors at Fairfax’s annual meeting today in Toronto. Watsa has been betting against financial companies since 2003, when Fairfax first invested in credit-default swaps. As a result, the company recorded investment gains of $2.72 billion last year.

- Copper rose in New York for a fifth time in six sessions as declines in inventories signaled demand is rising for the metal used in pipes and wires. Stockpiles monitored by the London Metal Exchange tumbled 2.4 percent to 480,400 metric tons. That’s the biggest one-day drop since Oct. 21.

- Crude oil futures fell after a U.S. government report showed a bigger-than-forecast increase in inventories. Supplies rose 5.67 million barrels to 366.7 million in the week ended April 10, the Energy Department said today in a weekly report. Inventories were forecast to increase by 1.75 million barrels, according to the median of analyst estimates in a Bloomberg News survey.

- The Organization of Petroleum Exporting Countries cut its forecast for oil demand this year for an eighth successive month as the economic slowdown in the world’s biggest oil consumers worsens. The estimate for 2009 global demand was lowered by 430,000 barrels a day to 84.18 million barrels a day, the producer group said. Demand will contract by 1.37 million barrels a day this year, or 1.6 percent. That’s slightly more than North Africa’s biggest oil supplier Algeria produces. OPEC forecast a decline of 1.2 percent last month. “The world economic recession continues to erode oil demand growth, particularly in the U.S., Japan and China,” the group’s secretariat said in its monthly oil market report today. Demand in industrialized countries will fall this year and developing economies are “likely to see only minor growth.” Three-quarters of the downward revision to oil demand came from developed economies, which will see demand fall to 46 million barrels a day. Consumption in those countries will decline 1.5 million barrels a day in 2009, OPEC forecasts, a drop of 3.2 percent compared with 2008. Demand for OPEC’s crude in 2009 will contract by 2.07 million barrels a day to 28.74 million barrels a day, the group said, calculating that figure using its world demand and non- OPEC supply forecasts. That’s about 330,000 barrels a day less than it predicted last month.

- The cost of delivering Middle East crude to Asia, at the lowest in at least 11 years, may decline further as newly built tankers joining the global fleet trade at a discount to existing vessels. The fleet of very large crude carriers, or VLCCs, will expand by 11 percent this year, Drewry Shipping Consultants Ltd. said in a report today. The London-based Baltic Exchange’s benchmark rate for Saudi Arabian oil shipments to Japan fell 5.1 percent to 25.81 Worldscale points yesterday. That’s the lowest since at least 1998 and equates to $7,490 a day. Frontline Ltd., the largest owner of the vessels, said Feb. 26 it needs $32,100 a day to break even on each of its supertankers. There are 40 percent more VLCCs for hire over the next 30 days than there are cargoes, according to the median estimate of two owners, five brokers, one derivatives broker and one trader surveyed by Bloomberg yesterday. The oversupply was 30 percent on April 6.

- Goldman Sachs Group Inc. ended its recommendation to be “long” on China’s A shares as the benchmark Shanghai Composite Index is nearing the target set when the bank initiated the strategy in December.
- OPEC is producing 722,000 barrels a day more than its output quota as implementation of the group’s record supply cuts stalls. Iran and Venezuela exceeded their quotas the most last month.

- Charles Schwab Corp.(SCHW), the largest independent brokerage by client assets, rose to a four-month high after reporting first-quarter profit that beat analysts’ estimates because of stronger-than-forecast trading.

- Southern California house and condominium sales soared 52% in March from a year earlier as buyers took advantage of prices 35% lower than the same period in 2008, MDA DataQuick said.

Wall Street Journal:

- Synaptics Inc.(SYNA) is putting more focus on smart phones. The Santa Clara, Calif., company, which designs the touch pads that control the mouse cursor on laptops and the modules that enable touch-screen phones, has long dominated the notebook computer market. Analysts estimate it holds more than half the market share for touch-pad technology. But as PC sales slow in this tough economy, Synaptics is focusing more on high-end smart phones, a market that has seen demand soar because of Apple Inc.'s iPhone. That shift has helped Synaptics' shares jump about 60% in the past 12 months and could drive further growth as the trend toward smart phones continues to grow.

CNBC:

- Somali pirates vowed to hunt down American ships and kill their sailors Wednesday and French forces detained 11 other hijackers in a high-seas raid, raising tensions a day after an abortive attack on a U.S. freighter loaded with food aid. Pirates fired grenades and automatic weapons at the Liberty Sun, but its American crew successfully blockaded themselves inside the engine room. The ship was damaged in Tuesday's attack but escaped and was heading to Kenya under U.S. Navy guard.

NY Times:

- Public Pension Managers Rethink Hedge Fund Ties. From New York to California, public pension funds staked billions in good times on the highest of Wall Street high rollers: hedge fund managers and corporate buyout specialists. But for many of these pension funds — and the millions of people who are relying on them for their retirements — that gamble is not paying off as hoped. Even before state and federal regulators began investigating whether several prominent investment firms had made improper payments to gain business from New York’s state pension fund, public pension funds were backing away. These private investments were supposed to outpace the stock market but, in many cases, lost value instead. Public pension funds that embraced these ventures — which range from real estate to commodities to private equity funds — have grown uneasy over the costs and secrecy typically associated with them, as well as with their inability to withdraw their money quickly if needed.

MarketWatch:
- With mortgage rates near all-time lows and a home buyer tax credit in place, U.S. home builders were much more optimistic about the housing market in April than they were in March, but they are still a long way from feeling good about their business, according to a monthly survey released Wednesday by a trade group.

The National Association of Home Builders said its home builders' index rose to 14 in April from 9 in March. It's the first time the index has been in double digits since October, when it was also at 14. It was the largest one-month increase in the index in more than five years, but it still shows that only about one in seven builders thinks business is good or fair. "This is a very encouraging sign that we are at or near the bottom of the current housing depression," said NAHB chief economist David Crowe. "If you're a potential buyer who's been sitting on the fence waiting for a sign that now is the time to act, this is it," said NAHB Chairman Joe Robson, a home builder from Tulsa, Okla.

- American Airlines parent company AMR Corp.(AMR) reported a wider first-quarter loss Wednesday due to falling passenger demand and lower ticket prices. Shares of AMR leapt 15.4% to $4.87 in recent trading.

Boston Globe:

- In the wreckage of the credit markets, investors are starting to look for opportunities. Count the state of Massachusetts pension fund among them. The $36 billion retirement fund for state workers is nearly tripling its potential exposure to distressed debt investments this year - mainly in beaten-up corporate debt - to $800 million. That's a small slice of the total portfolio, at 2 percent. But it's a sign that large investors are looking for places where money can be made, after a crushing year in virtually every realm of the market.

CNN:

- Nationwide ‘tea party’ protests blast bailout. Conservatives are showing they know their way around the Internet just as well as liberals, as more than 300 organized "tea party" protests raged across the nation Wednesday. The protests are a backlash against President Obama's bailout policies. Heralded on videos and blogs, the movement also appears, in part, a reflection of a general anger among people who contend the government takes too much from their pocketbooks. "TEA" stands for "Taxed Enough Already," according to teapartyday.com, which lists organizers and their phone numbers. Want to find a tea party? Text "teaparty" to 69302. Or get on Twitter or Facebook. As many Americans rush to file their 1040 forms on national tax day, cheering crowds across the country are heaving huge coolers with "Tea" painted on the side into bodies of water, harkening back to the pre-Revolutionary War protests in Boston, Massachusetts. At one protest Wednesday morning a sign read, "I read as much of the stimulus bill as my Congresswoman." Another read, "You can't put lipstick on socialism." Borrowing an often-quoted phrase that Republican Sen. John McCain has used, another protester held up her statement: "Stop generational theft."

FreedomWorks:

- Tea Party HQ and Map.

The Lantern:

- ‘Mad Money’ host blasts off on Jon Stewart. He says that Jon Stewart, the popular comedian who revolutionized "fake news," pulled a fast one on him during the March 12 interview on "The Daily Show." "It was a complete and utter ambush," Cramer said in an interview with The Lantern. "He told my staff that it was going to be fun, convivial, no clips, but [it] doesn't matter, he's a comedian, he can do whatever he wants." "Was it a fair fight? No, it wasn't even a fight. I came on with the idea of taking a high road approach and discussing the issues, obviously [Stewart] came on strictly to try to humiliate me," Cramer said. "It was brutal. Was he stand-up? Absolutely not. Did he comport himself as a gentleman? Hardly. It was a deposition; he wants to be a prosecutor."Cramer was also critical of Stewart's conduct off-camera."He had an animus toward me. At the conclusion of the interview, not on the mic, he said, 'I picked the wrong guy, I'm sorry,' but that's not gonna get out there," Cramer said. "He just said it to me as just a throwaway. His goal was just to humiliate and destroy me and probably get me fired, and last I looked, I still have a show."

Politico:

- President Barack Obama and his economic team are changing their tone on the economy. Gone are Obama’s bleak descriptions of crisis and catastrophe. In their place are “glimmers of hope” of a turnaround. The question is: why now?

Reuters:
- The current rally in stock markets may be the start of a new bull market, said hedge fund manager Crispin Odey, founding partner at Odey Asset Management and one of the hedge fund industry's highest profile figures. "Opinion is divided over whether this is a bear market rally or the beginning of a new bull market. I think it has the chance to be a new bull market," Odey said in a note to clients. "In little over a month much has changed", following a sharp rally in stocks led by banks and base materials stocks, he said. Odey, who remains positive on banks, owns shares in banks such as Barclays and said he believed the bull market will extend from the banking sector, "to encompass other industries where capacity has been sufficiently reduced as to allow pricing power to come through". Last year Odey made money betting on falling bank shares, but in February revealed he has been buying into UK banks because he thought they looked so cheap. Odey was one of the few hedge fund managers to make money last year, returning 10.9 percent in his European fund while the industry suffered record performance losses of 19 percent on average, according to Hedge Fund Research. "Everything is about re-establishing profit margins. My banks buy case demands only that net interest margins are rising, not that bad debts are falling," he wrote in the note to investors. "Since on my numbers these banks are trading on between two and three times future earnings, two years out, I am not afraid of the volatility in the share price."

- The U.S. government will release some results of its bank stress tests in May with the goal to stabilize the ailing banking sector, the White House said on Wednesday.

- Fiat SpA's chief executive, facing a two-week deadline to work out a partnership with Chrysler LLC, warned the troubled U.S. carmaker's unions he would ditch the idea unless they agreed to cut labor costs. In a clear message to U.S. and Canadian unions, Sergio Marchionne told Wednesday's Globe and Mail newspaper a deal on the partnership had only a 50-50 chance of succeeding because of lack of progress in talks with union leaders.

- Strong demand for USAA Auto's asset-backed securities offering on Wednesday led the issuer to increase the size of its sale and pay less to attract buyers.

- The U.S. economy continued to weaken in March and early April but the speed of contraction was fading amid scattered signs the country's recession may be nearing an end, the Federal Reserve said on Wednesday. "Five of the 12 districts noted a moderation in the pace of decline, and several saw signs that activity in some sectors was stabilizing at a low level," according to the Fed's Beige Book summary of anecdotal reports from its 12 regional banks.

Nikkei English News:

- US inventories for Japan’s top three automakers dropped to 73 days of supply at the end of March, down 20% from a month earlier. Toyota Motor’s inventory was at 64 days, while Nissan Motor’s was at 62 days, citing researcher Autodata Corp. A stockpile of 50-60 days is considered “ideal,” Nikkei said.

Bear Radar

Style Underperformer:
Large-cap Growth (-.43%)

Sector Underperformers:
Coal (-8.36%), Oil Tankers (-3.91%) and Semis (-2.44%)

Stocks Falling on Unusual Volume:
ABT, INFY, CTSH, NCTY, LUFK, SKYW, ISIL, JRCC, KMT and RJF

Stocks With Unusual Put Option Activity:
1) AMR 2) IP 3) DAL 4) PPG 5) INFY

Bull Radar

Style Outperformer:
Small-cap Value (+.12%)

Sector Outperformers:
Homebuilders (+4.78%), Road & Rail (+3.21%) and REITs (+1.23%)

Stocks Rising on Unusual Volume:
CHL, PFE, UL, HCSG, APEI, SNDA, GMKT, SHPGY, BUCY and SCHW

Stocks With Unusual Call Option Activity:
1) MDR 2) MRVL 3) CSX 4) M 5) LEN

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Wednesday Watch

Late-Night Headlines
Bloomberg:

- Citigroup Inc.(C) recommended buying shares of eight semiconductor stocks, including International Rectifier Corp.(IRF). Terence Whalen, an analyst at the NY-based bank, also gave “buy” ratings to Fairchild Semi(FCS), ON Semi(ONNN), Analog Devices(ADI), Silicon Labs(SLAB), Semtech(SMTC), Microchip Tech(MCHP) and Maxim Integrated Products(MXIM). Linear Tech(LLTC) and National Semi(NSM) were rated “hold,” while Intersil Corp.(ISIL) received a “sell.” “We know categorically that fundamentals are in a trough and, we believe, poised for some kind of rebound,” the San Francisco-based analyst wrote.

- EBay Inc.(EBAY), the most-visited U.S. e-commerce site, is planning an initial public offering for its Skype Internet-calling unit, which the company bought in 2005 for $2.6 billion. The IPO is slated for the first half of 2010, though the timing will depend on market conditions, the San Jose, California-based company said today in a statement.

- Foreign direct investment into China fell for a sixth month in March as investors cut spending amid the worst financial crisis since World War II. Investment dropped 9.5 percent to $8.4 billion from a year earlier, the commerce ministry said at a briefing in Beijing today. That compares with a 15.8 percent decline in February. For the first quarter, spending fell 20.6 percent to $21.8 billion.

- An Australian leading economic index fell in February to contract at the fastest annual pace since 1982. The index, a gauge of future economic growth, dropped 0.3 percent to 248.6 points from 249.4 in January, Westpac Banking Corp. and the Melbourne Institute said in Sydney today. The index shrank at an annualized rate of 5.1 percent. Today’s report adds to signs the economy will slide into its first recession since 1991 as a global slump cuts demand for exports from the world’s biggest shipper of coal and iron ore. Central bank Governor Glenn Stevens cut the benchmark interest rate last week to a 49-year low of 3 percent to spur demand.

- China, the world’s second-largest oil user, may increase gasoline and diesel prices by the end of this month as crude prices gained, said CBI China Co., a commodities researcher. The state government may raise gasoline and diesel prices by between 300 yuan and 400 yuan a metric ton based on the new pricing formula, CBI said. China in December launched a fuel pricing mechanism that takes into account the crude price, taxes and an “appropriate profit” for refiners. China increased gasoline and diesel prices as much as 5% on March 25^th.

Wall Street Journal:

- Today American taxpayers in more than 300 locations in all 50 states will hold rallies -- dubbed "tea parties" -- to protest higher taxes and out-of-control government spending. There is no political party behind these rallies, no grand right-wing conspiracy, not even a 501(c) group like MoveOn.org. So who's behind the Tax Day tea parties? Ordinary folks who are using the power of the Internet to organize.

- AT&T(T) May be in Talks with Apple(AAPL) to Extend iPhone Pact.

- The Obama administration is seeking to help Pakistan raise $4 billion to $5 billion at an international aid conference in Tokyo Friday in a bid to stabilize the finances of the key counterterrorism ally. Washington's effort, however, is coming into conflict with Saudi Arabia, which is showing only muted interest in supporting Pakistani Prime Minister Asif Ali Zardari, according to people involved in the deliberations.

- Ben Bernanke became Federal Reserve chairman intent on making the central bank less personality-driven than it was under Alan Greenspan and Paul Volcker. But as he confronts an economic crisis that has pushed the Fed to shatter precedent and lend trillions of dollars, Mr. Bernanke is waging a public-relations offensive that casts him in the starring role.

- Union officials are embarking on what is likely to be a protracted fight with business over the programs that enable immigrants to enter the country for temporary work. On Tuesday, leaders of two rival labor federations announced a framework for overhauling the U.S. immigration system that includes setting up an independent commission to assess how many immigrants should be admitted to fill temporary and permanent jobs without displacing U.S. workers. The AFL-CIO and Change to Win propose that such a commission would analyze regional and industry needs to make recommendations to Congress on annual levels of employment visas. The unions argue that current visa levels are outdated and often keep immigrant workers in temporary status, with fewer benefits and job protections. Business groups say temporary-worker programs are effective and don't disadvantage workers.

- So Goldman Sachs(GS) now wants to repay its $10 billion in taxpayer capital, with its CFO even saying the Wall Street giant has a "duty" to do so now that it is once again turning a nice profit. Congratulations to Goldman on its desire to escape federal bondage. The question taxpayers might still ask, however, is whether Goldie is also willing to forswear a bailout when it next gets into trouble. Is it still "too big to fail"?

- With many REITs trading at distressed levels amid a continuing credit crunch, experts say the stage is being set for merger-and-acquisition plays, with stronger companies taking over weaker rivals.

MarketWatch.com:
- Thailand's local currency credit rating was lowered on Tuesday by Standard & Poor's Ratings Services, which said that the recent political turmoil in the Southeast Asian nation has dealt a significant blow to investor confidence.

NY Times:

- Three longtime media executives are building an automated system to allow newspapers and magazines to charge for online access, including an “all you can read” subscription that would allow access to multiple publications, the executives said on Tuesday. Their company, Journalism Online L.L.C., aims to supply publishers with ready-made tools to charge Internet fees, an idea that has gained currency as advertising revenue plummets, but whose prospects of success are doubted by many media analysts.

- The Obama administration is drawing up plans to disclose the conditions of the 19 biggest banks in the country, according to senior administration officials, as it tries to restore confidence in the financial system without unnerving investors. The administration has decided to reveal some sensitive details of the stress tests now being completed after concluding that keeping many of the findings secret could send investors fleeing from financial institutions rumored to be weakest. While all of the banks are expected to pass the tests, some are expected to be graded more highly than others.

- Eager to escape the long arm of government, Goldman Sachs(GS) is preparing to return $10 billion in taxpayer funds as fast as the ink can dry on the check. But the bank, and a number of others, is quietly holding on to other forms of public support that come with virtually no strings attached. The program has allowed Goldman to issue $28 billion in debt over the last six months. The debt totals more than $40 billion each for Bank of America and JPMorgan Chase, and $23 billion for Morgan Stanley. The F.D.I.C. program does not come with the compensation and other regulatory conditions attached by Congress to the $700 billion bailout, but it charges the banks a small fee.

Business Week:
- Taxing Grandma to Subsidize Goldman Sachs(GS).

- In IBM's(IBM) biggest foray in business consulting since it acquired PricewaterhouseCoopers Consulting in 2002, the company announced on Apr. 14 that it is setting up a 4,000-person organization focused on helping corporations analyze data better and make smarter decisions. The consultants will mine IBM's research and software divisions for innovations. They'll also incorporate products from other companies.

IDDmagazine.com:

- An affiliate of Ellington Fund Management, an Old Greenwich, Conn.-based hedge fund specializing in mortgage bond investments and collateralized debt obligations, plans to go public, the company said in a statement on Tuesday.

Forbes.com:

- Wall Street’s 10 Favorite Senators.

CNNMoney.com:

- The great electric car race.

Reuters:

- CSX Corp (CSX), the No. 3 U.S. railroad, on Tuesday posted a better-than-expected quarterly net profit, sending its stock up 7 percent as it took steps to cut costs and keep prices steady amid a steep drop in freight volumes due to the recession. In after-market trade, CSX shares were up 7.2 percent at $30.60 from their official closing price on the New York Stock Exchange at $28.39.

- Intel Corp(INTC) beat quarterly expectations and declared the worst was over for a battered tech sector, but its shares slid 5 percent after it said economic uncertainty ruled out a clear revenue forecast. The world's top chipmaker said on Tuesday personal computer sales hit a trough in the first quarter but there was still too much market and economic turbulence to allow a precise projection for the second quarter.

- U.S. Interior Secretary Ken Salazar heard hours of Alaskans' opinions about drilling for oil and gas off their state's shores and came away on Tuesday promising a plan to allow development while accounting for environmental risks.

- Defense Secretary Robert Gates said on Tuesday the Pentagon will have a "robust" buy of Lockheed Martin Corp's (LMT) workhorse C-130J transport airplane, the longest-running military aircraft production program.

Financial Times:
- US car parts suppliers are set to ask for more government aid, including incentives to encourage fresh private equity investment in the beleaguered sector. Suppliers also want access to the Treasury department’s term asset-backed securities loan facility (Talf) and similar loans provided by the Small Business Administration. The Treasury last month approved as much as $5bn in government-backed credit insurance for suppliers to General Motors(GM) and Chrysler, the two carmakers being kept afloat by Washington. Suppliers can raise cash by selling receivables to the scheme at a discount. But Neil De Koker, president of the Original Equipment Suppliers Association, said: “There isn’t enough money in the programme to take care of all the suppliers. Many, many suppliers are still desperate.” The association’s members were considering asking for “a small percentage” of government backing for private equity deals, although “we haven’t quite figured out how to do that yet”, Mr De Koker said.

TimesOnline:

- Royal Dutch Shell is in talks with a number of Chinese companies about a possible joint effort to develop Iraqi oilfields. Jeroen van der Veer, chief executive of the Anglo-Dutch group, said yesterday: “We are in the process of forming partnerships for certain bids, and Chinese companies are a part of that.” If signed, a tie-up with Shell would represent China's second big effort to develop Iraq's vast reserves of oil, which, at 115billion barrels, stand as the world's third-largest pool after Saudi Arabia and Iran. CNPC became the first foreign company to sign a significant oil deal with the Iraqi Government after the toppling of Saddam Hussein in 2003, when it signed a $3billion agreement to develop the al-Ahdab field.

Telegraph:
- Pirates have attacked a US-flagged cargo ship off the coast of Somalia with rockets and automatic weapons, but failed to board the craft. The crew of the Liberty Sun was unharmed, but the vessel suffered some damage, according to a statement from Liberty Maritime Corp, which is registered in New York. The ship immediately requested help from the US Navy and was now under escort, the statement said.

21^st Century Business Herald:

- Wal-Mart Stores(WMT) may layoff 1,500 to 2,000 workers in China to cut costs after the company’s expansion in the Asian nation failed to meet expectations. The layoffs may be in the provinces of Guangdong, Hunan, Hubei, Sichuan and Jiangxi and in the municipalities of Beijing and Chongqing, it said.

Asahi:

- Japan’s government may forecast the country’s gross domestic product to contract by as much as 3% for the year that began April 1. The economy will probably contract even after taking into account the effect of the government’s $151 billion economic stimulus plan.

Late Buy/Sell Recommendations
- None of note

Night Trading
Asian Indices are -1.50% to unch. on average.
S&P 500 futures -.64%.
NASDAQ 100 futures -1.21%.

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Earnings of Note
Company/EPS Estimate
- (ABT)/.70

- (PJC)/-.23

- (PGR)/.43

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- (CCK)/.22

- (KMP)/.34

- (SCHW)/.16

- (ADTN)/.22

- (AMR)/1.62

- (BTU)/.93

Economic Releases

8:30 am EST

- The Consumer Price Index for March is estimated to rise .1% versus a .4% gain in February.

- The CPI Ex Food & Energy for March is estimated to rise .1% versus a .2% gain in February.

- Empire Manufacturing for April is estimated to rise to -35.0 versus -38.23 in March.

9:00 am EST

- Net Long-term TIC Flows for February are estimated to rise to $14.0B versus -$43.0B in January.

9:15 am EST

- Industrial Production for March is estimated to fall .9% versus a 1.5% decline in February.

- Capacity Utilization for March is estimated to fall to 69.6% versus 70.2% in February.

10:30 am EST

- Bloomberg consensus estimates call for a weekly crude oil inventory build of +1,750,000 barrels versus a +1,645,000 barrel increase the prior week. Gasoline supplies are expected to fall by -500,000 barrels versus a +656,000 barrel increase the prior week. Distillate inventories are estimated to fall by -1,000,000 barrels versus a -3,354,000 barrel decline the prior week. Finally, Refinery Utilization is expected to rise .1% versus a .11% increase the prior week.

1:00 pm EST

- The NAHB Housing Market Index for April is estimated to rise to 10.0 versus a reading of 9.0 in March.

2:00 pm EST

- The Fed’s Beige Book.

Upcoming Splits
- None of note

Other Potential Market Movers
- The weekly MBA mortgage applications report, (OMX) shareholders meeting, (UBS) annual meeting, (RTP) annual meeting, (BRCD) shareholders meeting, (SHW) shareholders meeting, (FFH) shareholders meeting, (LEN) shareholders meeting, (CBSH) shareholders meeting and the (SON) annual meeting could also impact trading today.

BOTTOM LINE: Asian indices are mostly lower, weighed down by industrial and financial stocks in the region. I expect US equities to open modestly lower and to rally into the afternoon, finishing mixed. The Portfolio is 75% net long heading into the day.

Stocks Finish Lower, Weighed Down by Financial, REIT and Insurance Shares

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